Linking ≠ endorsement.
↑ CFO Press Release 8/15/2014 CFO Jeff Atwater Announces Sentencing for Martin County Man Convicted of Arson
Chief Financial Officer and State Fire Marshal Jeff Atwater today announced that Joseph Edward Haas has been sentenced to 65 years in prison for setting a house fire in 2012 that injured four Martin County firefighters. Haas was convicted last month for attempted manslaughter, arson and arson resulting in injury. He also faces $1.3 million in restitution costs.
“Florida’s firefighters risk their lives for the protection of others, and any action that deliberately puts their lives at risk will not be tolerated,” said CFO Atwater. “This conviction is the latest example that arsonists will be held accountable for their life-threatening crimes.”
In late December 2012, Martin County Fire Rescue personnel responded to a fire on S.W. Blue Water Way, in Stuart. Four members of the search and rescue team were injured while inside the residence checking for occupants who may have been trapped. A subsequent investigation into the fire conducted by the Florida State Fire Marshal’s Office, Martin County Sheriff’s Office, Martin County Fire Department and the Martin County State Attorney’s Office provided supporting evidence that led to the defendant’s arrest on January 24, 2013.
A circuit court jury required less than one hour to reach a guilty verdict on all counts.
↑ Montville man accused of $182,000 insurance fraud
MONTVILLE — A township resident has been accused of insurance fraud for falsely claiming that various equipment in rental houses he owned had been vandalized or burglarized.
Kuruvilla John, who is also known as John Kuruvilla, 54, of Montville, has been charged with second degree insurance fraud. He is accused of submitting $182,000 in fraudulent insurance claims to two different insurance companies….
↑ Nepal: Floods, landslides kill 240 people, India announces relief fund of NRs 48 million – IBNLive
Kathmandu: India announced a relief assistance of Nepali Rs 48 million for the victims of the recent floods and landslides that have hit different parts of Nepal, claiming over 240 lives in two weeks.
↑ UP floods hit over 1,000 villages, death toll touches 28 – The Times of India
“Floods have so far claimed 28 lives with nine districts of the state being affected by the crisis. Relief and rescue operations have been launched (in these areas). In all, around 1,000 to 1,500 villages have been affected by the floods,” chief secretary Alok Ranjan told reporters here.
↑ German Bonds Hit Record High on Weak Data – NASDAQ.com
All other things being equal and generally speaking, the more people pile into German bonds, the less demand for US bonds, the lower US-bond prices, the higher US-bond yields, the higher US-mortgage rates (especially in the face of the continuing taper), the slower the real-estate recovery, the more pressure on the Fed to be careful not to raise rates prematurely.
Add in the labor-slack issue, and you have a correctly still dovish Fed.
↑ Drought lessons: Water wasters attend Water School – San Diego, California News Station – KFMB Channel 8 – cbs8.com
University of California, Davis, professor Jay Lund, who directs the Center for Watershed Sciences, laughed when he heard about Santa Cruz’s approach, but he said it might catch on.
“It makes sense, like traffic school,” he said. “It has an educational purpose, but also a punishment aspect to it.”
Install underground irrigation for drought-resistant trees (if any), and forget the lawn.
Are composting toilets legal there? They certainly should be.
There are tons of other things we could list. What would you add?
↑ Home builder confidence surges despite slower sales
After leaping decisively into positive territory in July, home builder sentiment pulled another surprise in August.
A monthly index from the National Association of Home Builders measuring confidence among single-family home builders rose 2 points to 55….
“As the employment picture brightens, builders are seeing a noticeable increase in the number of serious buyers entering the market,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.
“…a noticeable increase in the number of serious buyers entering the market….” Really?
↑ Part-Time Worker Levels Remain a Concern | St. Louis Fed On the Economy
Maria E. Canon:
Workers working part time for economic reasons (PTER)1 have been examined as a measure of labor underutilization. One of the recent concerns is that while the number of unemployed individuals and marginally attached individuals2 has been decreasing since 2009, the number of individuals who are working PTER has remained elevated (almost 7.5 million workers in April 2014).
↑ Abenomics — What Could Possibly Go Wrong? | Credit Writedowns
Exports were down 2% in June over a year earlier, and in volume terms they were down 2.5% from September 2012, just before the Abenomics driven yen devaluation started. So if one of the objectives of Abenomics was boosting exports it is obviously failing. As Naohiko Baba, chief Japan economist at Goldman Sachs Group and former central bank employee told Bloomberg: “The BOJ predicted that a weak yen would boost export volumes and spur spill-over effects by increasing domestic production and expanding the overall economy — but that path isn’t working. It raises the question of what the weak yen has done in terms of living standards of the general public.”
It seems that manufacturers have been moving production to lower-cost countries during the years of yen strength, thus reducing the effect of exchange rates on exports. Honda, for example, has more car production capacity in North America than its home market and last year exported more vehicles from its U.S. factories than it imported into the country from Japan.
As far as I can see, all of this points to one simple and evident conclusion: that Japan needs deep seated cultural changes, especially ones directed to greater female empowerment and more open-ness towards immigration. Hardly matters for central bank initiatives, and indeed ones for which Shinzo Abe, who naturally has given his name to this new economic trend, is singularly ill equipped to carry through. Japan needs a series of structural reforms — like those under discussion around the third arrow — but these would be to soften the blow of workforce and population decline, not an attempt to run away from it. Monetary policy has its limits. As Martin Wolf so aptly put it, “you can’t print babies”.
Abenomics was never going to be enough, and the sale-tax rise was just a mistake on top of not doing enough.
↑ U.S. Investment Outflow Hits Record as China Cuts Holdings – Bloomberg
The U.S. posted a record cross-border investment outflow in June as China and Japan reduced their holdings of Treasuries and private investors abroad sold bonds and notes.
The total net outflow of long-term U.S. securities and short-term funds such as bank transfers was $153.5 billion, after an inflow of $33.1 billion the previous month, the Treasury Department said in a report today. The June figure, and $40.8 billion in net selling of Treasury bonds and notes by private investors in June, were the largest on record, the Treasury said.
When coupled with the Fed taper and considering that there’s a feedback lag, what will this do to mortgage rates over the next few weeks if the trend continues? It will raise them if….
As pointed out above, the Fed knows this and will postpone raising interest rates.
We aren’t that confident about the US economy yet. Much of what we read strikes us as hyping up the markets rather than focusing on the fundamentals.
The job numbers are still sitting on top of many people who are working much less than they want to: slack. Real estate is in a stall because of low wages and low hours and banks hesitant to mark-to-market.
All of that is slowing things, at least slowing the rate of growth (and that’s being optimistic).
↑ Ominous Portents in Consumer Sentiment | The Wall Street Examiner
Scathing commentary by Lee Adler:
While the media focuses on the meaningless short term squiggles in consumer confidence indicators, I like to look at the long term trend. I like it because US consumers in the aggregate are far better forecasters of markets and the US economy than are the professional economic and financial pundits who are so focused on the meaningless short term headline numbers.
The verdict of consumers has been consistent for the past 16 years. Thumbs down. That matches the decline in real median household income and living standards that most Americans have experienced over that period. It represents the long term decay of the US economy, an economy that is increasingly structured to benefit only the few at the top while leaving more and more Americans behind.
These trends have been promoted by the Fed’s policies of ZIRP and QE. The benefits of these policies accrue entirely to bankers, hedge fund operators, and corporate executives who order buybacks of their company’s stock to buy the stock options they granted to themselves. They shrink their companies, lay off workers, increase the pool of unemployed and underemployed workers and pressure labor market rates lower in the process. These parasitic policies will, if allowed to play out indefinitely, eventually kill the host—the US economy.
↑ With the wrong diagnosis, and wrong medicine, the patient is getting sicker. Change course now.
In the same way that the KfW has been crucial to German industry’s success (both historically, and recently with strong counter-cyclical investments since 2007), and China’s state investment bank (CDB) to China’s emerging innovative firms (e.g. Hwawei in telecoms, Lenovo in IT, and Yingli in renewable energy), Europe must learn to use its public financial institutions to direct investments in this way. This is because even if the ECB finally becomes a proper central bank (lender of last resort needed to calm fears from speculative financial markets), quantitative easing alone does not work: the money (as we have seen with the experience of the Fed and the Bank of England) simply ends up in the coffers of banks that don’t lend. Money creation must be ‘directed’ in productive areas in the real economy, and it is through such public institutions that directionality has taken place in the most successful countries in the world. Indeed, both Obama’s stimulus programme and China’s 5 year plan (the latter spending $1.7 trillion on 5 new sectors from environmentally friendly technologies to new engines), are largely directed towards ‘greening’ all sectors.
Fiscal spending without borrowing is the correct path.
↑ How Poorly Paid Chinese Officials Get Away With Owning Dozens of Homes – China Real Time Report – WSJ
What a mess!
Ordinary Chinese people have a dim view of Chinese officials, with many believing that they’re prone to accepting bribes or embezzling public funds for personal use. Also common is the belief that they own an obscene number of homes — something at odds with their relatively low salaries.
Take, for example, Wu Zhizhong, a former vice secretary-general in Inner Mongolia, who was recently found to own 33 properties in China and a home in Canada. Such revelations came after he was charged with accepting bribes and embezzling public funds late last year, according to the state-run Xinhua News Agency.
We hope for China’s sake that China’s President Xi Jinping is on the up-and-up.
↑ Walls Come Tumbling Down | Sparse Thoughts of a Gloomy European Economist
The solution seems to be one, and only one: expansionary fiscal policy, meaning strong increase in government expenditure (above all for investment) in countries that can afford it (Germany, to begin with); and delayed consolidation for countries with struggling public finances. Monetary policy should accompany this fiscal boost with the commitment to maintain an expansionary stance until inflation has overshot the 2% target.
↑ My Economic Window: TheTreasury and the Fed are at Loggerheads over QE
How successful was operation twist at changing the maturity structure of Treasury securities held by the public? In Figure 4, I break down Treasuries held by the public as a fraction of total debt outstanding. This figure shows that although the Fed switched its holdings from yields of three months to two years to yields in the two to ten year range (Figure 3) this operation was swamped, after November of 2008, by Treasury operations that increased the supply of maturities in the two to ten year range (Figure 4). The end result was that the public ended up holding more of these two to ten year bonds in 2010 than before the recession hit.
Could we have a little coordination here guys?
↑ The decline in the labour force participation in the US | vox
Steven Braun, John Coglianese, Jason Furman, Betsey Stevenson, Jim Stock:
…existing distortions, market failures, or circumstances result in sub-optimal decisions around participation. Moreover, given the role of the participation rate in the level and potentially even the growth rate of national output, it has broader ramifications for fiscal sustainability, the rate of return of pay-as-you-go systems, and the economy as a whole.
A number of policies would have the benefit, or even the goal, of raising the labour force participation rate. The most significant of these is immigration reform, which the Congressional Budget Office (CBO) estimates would increase the labour force by 6 million workers by 2023 and raise the participation rate by 0.7 percentage points. But policies targeting specific demographics can also have a sizeable impact. After increasing strongly starting in the 1960s, since 2000 female labour force participation has generally been flat or declining. A number of barriers and distortions suppress female labour force participation, including the lack of paid leave, workplace flexibility, and continued discrimination on pay. Finally, building labour force attachment among the young can raise their participation profile throughout life.
Reducing income inequality would have much the same impact without having to increase the population. Furthermore, sharing the benefits of technological development nationwide rather than some people trying to reap all the profits from an ever-shrinking middle class would help immensely.
Robots really are going to replace workers. Human beings should benefit from that just for being human beings regardless of how much money they’ve managed to gain.
↑ Is there a London property bubble? – YouTube
Talk of a London property bubble is the topic du jour in the city. Kate Allen, property correspondent, debates with investment editor James Mackintosh whether it is a bubble or merely prices reacting rationally to demand outstripping meagre supply.
For us, it’s not an either/or but both.
↑  Jim Rickards on Europe and Manila Chan on the decline of Atlantic City – YouTube
According to Jim Rickards, we are in a double-dip recession within a depression.
[@ 4:42] Erin talks to author and economist Jim Rickards, who is bullish on Europe’s political cohesion and nowhere near as downbeat on its economy as others.
We disagree that Europe is doing things better than the rest of the world. We think their monetary policy is way too weak and their fiscal policy practically non-existent.
↑ [Recommended] Chinese Housing Market: Sentiment Improves, But Fundamentals Remain Dire
We aren’t used to seeing such articles in Forbes. Good for Junheng Li:
…the underlying problem of an excess supply of AAA housing in a country that needs more BB housing (i.e., social or affordable housing) has not gone away. Both selective and general macroeconomic stimuli have only mitigated the problem in a very limited way. This demand-supply mismatch will resurface with a vengeance as soon as central authorities recognize that their key economic objectives — rebalancing the economy and reining in the biggest credit bubble ever seen in an emerging market —require a significant correction in house prices.
This correction can take place without a socially destabilizing increase in unemployment, provided that the central government makes available, directly or indirectly, the financial means to boost social and affordable housing construction.
↑ Only Rich Know Wage Gains With No Raises for U.S Workers – Bloomberg
Federal Reserve Chair Janet Yellen has zeroed in on faster wage growth as an important milestone for declaring the job market healed and ready to withstand policy tightening, even as other labor measures improve. Stagnant earnings also explain an economy that’s having trouble sustaining a rebound in housing and consumer spending, according to David Blanchflower, a professor of economics at Dartmouth College in Hanover, New Hampshire.
“The bottom line is, we’re a million miles from full employment,” said Blanchflower, a Bank of England policy maker from 2006 to 2009. …
The National Association of Realtors projects a 3 percent decline in purchases of existing homes this year to about 4.9 million from 5.1 million in 2013, while retail sales stalled last month.
Yellen referenced this in July 15 testimony before the Senate Banking Committee, saying the recovery still isn’t complete and the “slow pace of growth” in measures of hourly compensation are a sign of “significant slack” in labor markets.
“We are facing a problem of rising inflation,” Martin Feldstein, a former chairman of the White House Council of Economic Advisers, said June 4 in a “Bloomberg Surveillance” interview. “They’re probably going to respond too weakly, too slowly.”
Yellen’s counter: Nominal average hourly pay, which increased about 2 percent in June from a year earlier, is still about half the 3 percent to 4 percent pace she has said she considers “normal.”
So for now, Dartmouth’s Blanchflower will keep waiting for the jump in inflation hawks have been forecasting for years.
“We’ll worry about it when we see it,” he said.
Martin Feldstein has been saying that same thing since the rates were first held low after the onset of the Great Recession, which has really been a depression in our view. If we had done what he wanted us to do back then, the depression would only have been worst.
Higher wages and more hours are more important than worrying about inflation right now. In fact, there’s still a real risk of disinflation and even deflation.
↑ US July housing starts at 1.093 million vs. 970,000 estimate
Please note that permits are down and savvy economists aren’t as optimistic as builders are.
U.S. housing starts and building permits rebounded strongly in July, suggesting the housing market recovery was back on track after stalling in the second half of last year.
Groundbreaking for single-family homes, the largest part of the market, increased 8.3 percent in July to a 656,000-unit pace. …
Starts for the volatile multi-family homes segment jumped 33 percent to a 423,000-unit rate, the highest level since January 2006. This market segment is being buoyed by a shift towards renting, as many prospective buyers give up on the dream of owning a house.
The government reported last month that the homeownership rate hit a 19-year low in the second quarter, while the rental vacancy rate was the lowest in more than 19 years.
… Though permits are now slightly lagging starts, a survey on Monday showed confidence among single-family home builders hit a seven-month high in August, which bodes well for groundbreaking in the months ahead.
Permits for single-family homes increased 0.9 percent to a 640,000-unit pace. Permits for multi-family housing soared 23.6 percent to a 382,000-unit pace.
↑ The Question Of The Week: What Do Falling Yields Mean For The US Economy? – The Capital Spectator
For the moment, the main slice of wobbly behavior is housing. But even here, there’s little to suggest that residential real estate is in high-risk territory as it relates to the economy overall.
It’s not in high-risk territory; but as the article points out, there is risk.
Most importantly is that real estate is definitely not in takeoff mode because the labor fundamentals are not there and the lending standards won’t be allowed to dump to reckless levels for the foreseeable future.
That’s a good thing.
↑ Is the West Risking Financial Blowback From Sanctions on Russia?
Monetary stimulus is simply not remotely an adequate substitute for government spending. Even the austerian IMF has been forced to acknowledge that fact. Admittedly, they’ve done that in techno-speak, by stating that it has found that fiscal multipliers are almost always greater than one, meaning that government spending produces GDP growth greater than the spending rise. So even if on paper debt levels rise, the critical debt to GDP ratio falls because the increase in the denominator more than offsets the rise in the numerator.
So to the extent that European officials rouse themselves to address these alarming results, they will administer the wrong medicine.
And remember, these faltering results came in before the so called Tier Three economic sanctions against Russia went into effect.
Our readers know that we too have been completely opposed to austerity and for fiscal spending on strategically productive sectors (of the real economy, not wild Wall Street speculation).
↑ Heat from fire damages 14 nearby homes, fire engine | News – Channel3000.com
Images of nearby homes showed melted, rippled siding the department said was caused by radiant heat.
↑ Hollywood Development Site Not Over Active Fault
A state official says there is no active earthquake fault under the site of a proposed development in Hollywood.
His conclusion supports previous testing by experts hired by the developer hoping to build a 16-story apartment complex at the former home of KFWB’s radio studio.
↑ Stevens Point waits for FEMA to revise flood zone
Before the city can officially redraw its maps, the seawall upgrade has to earn approval from the Federal Energy Regulatory Commission and the Federal Emergency Management Agency.
The wall will be paid for by a special assessment to the affected homeowners. The city spent about $321,000 on the project, which averages about $1,220 per homeowner, Schatschneider said. The homes are located south of Clark Street.
Nealis, who is a realtor, said the required flood insurance has been a reason that some families have been unable to buy homes in the area, with some houses requiring more than $2,000 worth of flood insurance coverage.
It bears mentioning that if the wall is upgraded and the flood map redrawn and the wall fails in a flood, the impacted homeowners won’t be covered.
Let’s hope any upgrade will be up to the task.
↑ Why treasurers should go back to economics school
We agree with this other than that we need to borrow to finance government spending.
↑  Scott Sumner on monetary off set and Marc Chandler on trading currencies – YouTube
[@ 4:54] Erin talks to Scott Sumner, an economist and professor at Bentley University, about his takeaways from the American Recovery and Reinvestment Act of 2009.
[@ 14:28] Erin speaks with currency expert Marc Chandler to explore the rise of the renminbi and economic sanctions.
↑ Where Cash Buys Are Hitting the Housing Market Hardest – CityLab
Credit can’t compete with cash, especially when so many would-be buyers are already paying off student-loan debt. As long as a big chunk of the housing market is reserved for big buyers, whole classes of renters will be priced out of the American Dream.
Renting is not the American nightmare, some rentals are really nice, and renters often have fewer headaches.
↑ Real Estate Matters |Young homeowner ponders becoming landlord – The Washington Post
I am 26, live in Nashville, and just bought my first place. I am doing great, but I’m not sure of what to do next. I am in a 30-year mortgage, which allows me to save a nice portion of my paycheck after my expenses are paid.
However, I already have a nice lump sum of cash just sitting in savings. While this is a nice problem to have, I know I should be investing. But where should I put my money?
Should I put my money into the stock market or save for another down payment on a rental property? I am young and ready to learn.
Personally, we’d steer clear of equities right now (at least wait for the next correction to be over); but otherwise, ….
↑ Oil spill from power plant closes 15-mile stretch of Ohio River | Reuters
The U.S. Coast Guard closed a 15-mile stretch of the Ohio River on Tuesday after at least five thousand gallons of fuel oil spilled from a 60-year-old power plant owned by Duke Energy 20 miles east of Cincinnati, Ohio.